Chapter 16: Controlling And Such Flashcards
Controlling
Monitoring performance, comparing it with goals, and taking corrective action when needed
Six reasons why control is needed
1) to adapt to change and uncertainty
2) to discover irregularities and errors
3) to reduce costs, increase productivity, or add value
4) to detect opportunities or increase innovation
5) to provide performance feedback
6) to decentralize decision making, and facilitate teamwork
Control process steps
(4 steps)
1) establish standards
2) measure performance
3) compare performance to standards
4) take corrective action if needed
Control standard
The first step in control process
The desired performance level for a given goal
Control charts
Visual statistical tool used for quality control purposes
Management by exception
Control principle that states managers should be informed of a situation only if data show a significant deviation from standards
Feedforward control
Focussed on preventing future problems
Concurrent Control
Entails collecting performance information in real time
Feedback control
Amounts to collecting performance information after a task or project is done
3 levels of control
Strategic control by top managers
Tactical control by middle managers
Operational control by first line managers
Strategic control
Monitoring performance to ensure that strategic plans are being implemented and taking corrective action when needed
Tactical control
Motiniroing performance to ensure that tactical plans - those at the divisional or department level - are being implemented and taking corrective action as needed
Operational control
Monitoring performance to ensure that operational plans - day to day goals - are being implemented and taking corrective action wheh needed
Six areas of control
Physical Human Informational Financial Structural Cultural
Physical area
Includes buildings, equipment, and tangible products
Human resource area
Monitor employees personality tests l, drugs tests, performance tests, job satisfication
Informational area
Production schedules
Sales forecasts
Analyses of competition
Public briefings
Financial area
What’s the advertising budget, how much is owed, is there enough cash on hand
Structural area
Who reports to who
2 types: beaurocratic and decentralized
Bureaucratic control
The use of rules, regulations, formal authority to guide performance
Decentralized control
An approach to organizational control that is characterized by informal and organic structural arrangements, opposite of bureaucratic control
Supply chain
Sequence of suppliers that contribute to creating and delivering a product, from raw materials to production to final buyers
Budget
Formal financial projection
Incremental budgeting
Allocating increased productivity decreased funds to a department by using the last budget period as a reference point; only incremental changes in the budget request are reviewed
